It was 6:30 in the morning when Kirk Simpson called to discuss Wave Accounting Inc.’s latest round of financing.

The co-founder and chief executive of the Toronto-based startup was on California time Wednesday, the day the company announced a US$12-million series B round of funding led by the Social+Capital Partnership, a Palo Alto, Calif.-based venture fund.

“It’s becoming more and more important that we at least have a presence here on an ongoing basis,” Mr. Simpson said, explaining his frequent visits to San Francisco and Silicon Valley.

Wave’s initial funding came from Canadian sources but as the free Web-based accounting application business has grown, Mr. Simpson and co-founder James Lochrie started to look south for further injections of capital as well as mentorship and peer-based learning.

When they did a $5-million series A round of funding last October, they connected with Devdutt Yellurkar, general partner at Charles River Ventures — the Boston, Mass. and Menlo, Calif.-based early-stage venture capital firm that led the round – who helped them make further connections.

That was important because it was not just the money that drew them to the Valley, Mr. Simpson said, it was also the atmosphere of unrestrained ambition.

“They generally swing for the fences with no safety net underneath them,” he said of the entrepreneurs he has met in places such as Boston and California. “I think here they’ve seen it around them on an ongoing basis … they know someone who worked in a company that went big. So there’s just more of a history of that kind of stuff and I think it becomes pervasive. “I think that’s just beginning to happen in Toronto and in Canada and I think it’s a great opportunity,” Mr. Simpson added.

Howard Gwin is managing director of OMERS Ventures, the $180-million venture capital fund run by the Ontario Municipal Employees Retirement System pension, which participated in Wave’s $1.5-million seed financing last June, as well as both its series A and B rounds.

At a conference on emerging technology companies hosted by PricewaterhouseCoopers LLP in Toronto on Tuesday, Mr. Gwin said it’s a misconception that Canadians are less entrepreneurial than their Silicon Valley or Boston counterparts.

“I think we have an incredible engineering-centric mindset in Canada,” he said. “Where we lack leverage is the amount of funding and mentoring that’s required to take those ideas to big companies.”

Mr. Gwin said the answer to that problem is to invest more money into fewer companies, the ones with greater chances of making it big.

In the meantime, tech CEOs are likely to continue making regular cross-border trips.

“For those of us here in Canada, particularly in Eastern Canada, you have got to be building up your Air Miles, you’ve got to be going down to the Valley at least quarterly,” said Mark MacLeod, general partner at Real Ventures, a $50-million seed-stage fund based in Montreal.

In a session on how startups can prepare for an exit, primarily an acquisition by a larger company, Mr. MacLeod said even prior to a transaction being an option, CEOs should be making regular appearances in the Valley.

“They should be doing the rounds, meeting anyone and everyone in the space in corporate development, business development, product development.”

Selling Wave is not Mr. Simpson’s goal right now, but he has built a strong network in California, he said, connecting with other entrepreneurs such as Ryan Howard, CEO of Practice Fusion, a San Francisco-based electronic medical record management company.

“He [Mr. Howard] has been phenomenal for us in terms of making intros, helping open up our minds to what’s possible and helping us understand the growth phases we’ll go through,” Mr. Simpson said.

Wave launched its free accounting service for small businesses in November 2010 and makes money through targeted advertising and group-buying opportunities.

It has almost 250,000 users and although 70% of those are in North America, Wave has signed up businesses in more than 200 countries, it said. The company’s team has also expanded, Mr. Simpson said, growing from 25 to about 50 employees since its series A funding last October. Wave did not disclose a valuation related to the financing round nor any specific plans for the funds.

“We have broad ambitions about the opportunity that’s in front of us and we don’t want to be undercapitalized,” Mr. Simpson said, adding that he wants the company to continue to have the flexibility to expand its product line or make strategic acquisitions for example.

Wave acquired Winnipeg-based Small Payroll last fall and rebranded that company’s product as Wave Payroll, which it launched in February. Wave charges users a small fee for the payroll software but its accounting application remains free.